WHEN Moody's Investor Service raised the Philippines's credit rating to one notch below investment grade in October 2012, it became clear that moving up one more notch to investment grade would come sooner than later. And, indeed, two other major credit-rating agencies have already upgraded the country's rating.

The London-based Fitch Ratings raised the Philippines's credit rating to one notch below investment grade in June 2012. It was the first to upgrade and to raise our credit rating to the coveted and much-anticipated investment grade. And then Standard & Poor's (S&P) did the same a month later.

On March 27 Fitch declared the Philippines "investment grade," the first-ever such rating achieved by the country from a major credit-rating agency. In a statement, Fitch said it upgraded the Philippine sovereign's long-term foreign-currency rating to "BBB-" from "BB+," and its long-term local currency to "BBB" from "BBB-," with a "stable" outlook on both ratings.

An investment grade simply means that the Philippines has a strong ability to pay its debt. An investment grade is also a seal of good housekeeping. It tells investors it is safe to do business here.

The immediate impact was felt by the stock market. The Philippine Stock Exchange main index (PSEi) set a new all-time high on March 27, closing at 6,847.47 points, which surpassed its finish of 6,835.21 on March 6. The benchmark index also gained 182.35 points during the day, its highest one-day point increase since August 21, 2007; percentage-wise, the 2.7-percent rise was the biggest since May 17, 2012.

Actually, the Philippine stock market had been touted as one of the best performers in Asia even before the upgrade. The main index recorded new closing highs for a total of 24 times in the first quarter of 2013. Thus, the market continued its uptrend, not necessarily because of the investment-grade rating, but because investors were enjoying high returns for their money.

In general, businesses did not see any significant impact on their borrowing costs, precisely because interest rates were already investment-grade low even before Fitch's action.

Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr., in a speech two weeks before the Fitch announcement, stated that "it could be said that the financial markets have already voted the Philippines as investment grade as evident in the pricing of our credit default risk in the same range as investment-grade economies."

Amid the uncertainties in the world economy, the Philippines has been receiving positive observations and actions. Once described as Asia's laggard or basket case, the country is now being described as an emerging tiger economy. The World Bank has observed that macroeconomic stability is now the new normal in the Philippines, while the International Monetary Fund has singled out the Philippines for being the only country whose growth forecast it has upgraded-from the initial 4.7 percent to 6 percent in terms of gross domestic product (GDP) for 2013. The World Bank also raised its outlook on the Philippines's 2013 GDP growth from 5 percent in October 2012 to 6.2 percent in December. Likewise, the Asian Development Bank raised its earlier 2013 forecast of 4.8 percent (April 2012) to 5.5 percent in October.

Some people may argue that getting an investment grade does not necessarily mean investors will come rushing in. I agree that we have to do more to attract investments, such as improving infrastructure and lowering the cost of doing business. Investments and interest rates are the quantifiable consequences of getting an investment grade, which are debatable.

I see a non-quantifiable impact, which I consider as equally important, if not more important, than getting preferential treatment from creditors and investors. An investment grade makes me more optimistic about the future of our country.

This is a first for our country and we should all be proud. When we travel abroad, we no longer have to look away when the Philippines is mentioned. Our businessmen can look their peers on the other side of the negotiating table in the eye as equals. Overseas Filipino workers, even students and travelers, should feel proud to introduce themselves as Filipinos.

Yes, world, we're investment grade; we're cool!

By Manny B. Villar